UFC request court ruling on PI by Monday or will move UFC 198 out of New York

January 20, 2016

Attorneys for the UFC have issued a letter to Judge Kimba Wood of the Southern District of New York requesting a ruling on its Preliminary Injunction request which would grant the company to hold a UFC event at Madison Square Garden in April.

Citing its need to market and plan the event, it is requesting that the Court issue a ruling by January 25.  Previously, the UFC had requested oral argument on the matter to argue its Preliminary Injunction request and the opposition filed by New York.

New York PI – Letter From Zuffa Requesting Ruling by 1.25 by JASONCRUZ206

The UFC stated that if no ruling, even a limited order enjoining the Attorney General from interfering with the scheduled event, is determined by January 25th, it will “lock in and market an event outside New York for its April 23rd event.”  They indicate that they would try again in the fall and amend its Preliminary Injunction motion papers to reflect the new date.

Payout Perspective:

You may recall that New York was granted two extensions to file opposition to the Preliminary Injunction.  Zuffa had requested oral argument but the court had not issued a ruling as to whether it would agree to give Zuffa court time to do so.  Courts may issue rulings based on the court filings and not need the parties to argue the matter.  Parties must request time to argue if they feel compelled to do so.

Courts usually do not like ultimatums issued to them.  Despite the UFC’s need (legitimate or not) to have a ruling soon to determine to plan and market for April, Courts will not succumb to this tactic.  We will see if Judge Wood will have something to the parties by this Monday.

Silva issues apology to UFC, released from contract

January 15, 2016

Wanderlei Silva issued a public apology to the UFC regarding statements he made last year about the UFC “fight fixing.”  The UFC released him from his contract according to Silva’s attorney.

Silva wrote a public apology on his official Facebook page which retracted the allegations that spurred a lawsuit by the UFC.  Last year, Campbell and Williams, the same law firm that just assisted Nick Diaz with resolving his dispute with the NAC, sued Silva for defamation.

Via Silva’s Facebook post:

“In July of last year, I posted a number of comments on Facebook and Twitter, which included repeated claims that the UFC “fixed fights” and that I could “prove it.” I hereby retract any such statements in their entirety as I failed to understand that the term “fight-fixing” specifically refers to the illegal action or practice of dishonestly determining the outcome of a contest before it occurs. I understand the UFC’s reputation would be harmed if my fans and others actually believed the UFC engaged in fight fixing, and I have no evidence to support such a claim. I apologize for any misunderstanding my comments may have caused.”

It appears that the Silva and the UFC have resolved their legal dispute.  Although there has been no official word that the lawsuit is over, all signs point to the end.

Terms of the agreement are confidential per a report from MMA Junkie.

From the release, it appears that Silva will be free to sign with any organization of his choosing. Ross Goodman, Silva’s attorney, indicated that they plan to proceed with a lawsuit against the NAC once the commission rules on Silva’s suspension.

Payout Perspective:

It appears that the on-going saga with the NAC will continue until a hearing next month.  But, Silva will be able to fight where he sees fit.  The apology and subsequent release seems to be a joint agreement to part ways which seems strange considering the UFC is very aggressive when it comes to the protection of its brand.  The Facebook post retraction looks to be drafted by someone other than Silva which may conclude that the parties are willing to part ways instead of conduct further discovery in the UFC-Silva defamation claim.

Top Rank survives Haymon’s Motion to Dismiss

January 12, 2016

Top Rank Boxing withstood another motion to dismiss from Al Haymon in the ongoing lawsuit filed in federal court in Los Angeles.  The Honorable John Walter ruled, without oral argument, that Top Rank’s Second Amended Complaint was sufficient enough to survive a motion to dismiss.

A hearing on the motion to dismiss was to be heard on Monday but the court nixed this hearing ruling without the need for oral argument.  Previously, the court had dismissed Top Rank’s lawsuit but allowed it to re-file and amend, which it did.  But, Haymon had filed another motion to dismiss citing that nothing had changed in its amended filing.

Perhaps an ominous sign from Judge Walter for Top Rank was the notion that the arguments set forth in Haymon’s motion to dismiss might be best addressed in a motion for summary judgment.  A summary judgment is a motion brought by a party would dismiss a lawsuit prior to trial due to the fact that one side’s claim(s) that there is no general dispute as to any material fact and the case should be dismissed as a matter of law.  Of course, Judge Walter indicated in his order that he expects both parties to file motions for summary judgment.  The brief order inferred that it while it sided with Haymon’s arguments, the rule of law dictated that Top Rank’s Second Amended Complaint had sufficient information to go forward.

Top Rank sued Al Haymon for alleged violations of antitrust and state laws with respect to Haymon’s PBC promotion which includes its alleged managing and promoting of fighters.

The court opinion indicates that while it was not persuaded that Top Rank had cured all of its deficiencies in its state law claims, it will not entertain any more motions to dismiss.

Order on Motion to Dismiss by JASONCRUZ206

Payout Perspective:

And now we enter the discovery phase of the lawsuit as the court essentially tells the parties they have exhausted all of the motion to dismiss.  Haymon will now have to answer the 105 page Second Amended Complaint.  From there, it will be written discovery and depositions.  We shall see if the elusive Al Haymon will be summoned for deposition.  MMA Payout will keep you posted.

15 for 15: No. 5 UFC Antitrust Lawsuit survives through 2015

December 29, 2015

The antitrust lawsuit filed by former UFC fighters against the company continued on into 2015 with various motions attempting to move and dismiss the case. As we end 2015, the case is now in Nevada before Judge Richard Boulware and the parties enter the discovery phase of the lawsuit.

In December 2014, fighters filed multiple lawsuits against the UFC (“Zuffa” to be technically correct) in federal court in San Jose. The attorneys for the UFC filed a motion to transfer the venue to Nevada. In June, the court in San Jose granted the UFC’s request and the lawsuit was moved to Nevada.

Order – Motion to Transfer Venue by JASONCRUZ206

In addition, the UFC filed a Motion to Dismiss.  The motion was denied by Judge Boulware in late September.  This meant that the lawsuit would continue.

The parties now are in the discovery phase as the UFC is turning over a voluminous amount of documents over to the plaintiffs.  There is no trial date set.  At some point in 2016, we may see the parties reach out to the third parties that may relate to some of the claims in the lawsuit (e.g., Scott Coker, Bjorn  Rebney, etc.).  Expect this to take some time as their lawyers will get involved.  Also in 2016, we should may see depositions of UFC employees and plaintiffs.  After that, you can expect a motion for summary judgment by either side (or perhaps both).  If you were hoping to see a trial in 2016, you are probably hoping against hope.

15 for 15: No. 7 – UFC’s legal battle in New York

December 27, 2015

The lawsuit filed by the UFC, its contracted fighters and others seeking to overturn the law prohibiting MMA in the state seemingly came to an end in March when Judge Kimba Wood dismissed the remaining claims against the state of New York.  However, that was not it for the legal maneuverings for the UFC in the state.

The UFC subsequently appealed the decision and retained former U.S. Solicitor General Paul Clement and his firm to handle the appeal before the Second Circuit Court of Appeals.  Clement also is known as the attorney working on the NFL Deflategate litigation.

Last month, the state of New York filed its response to the UFC’s appeal brief.  The UFC filed its reply and requested oral argument.  If granted, the oral argument should take place sometime in 2016.

The issues in question deal with whether the law banning pro MMA in the state violates the First Amendment and whether the law is unconstitutionally vague.  The First Amendment issue presents an interesting issue as we have delved into its implications.

Not only does the UFC have an appeal, in September in filed another lawsuit in federal court in New York seeking an injunction to hold an event in New York’s Madison Square Garden this April.  The new lawsuit takes heed to the words written by Judge Wood in its opinion dismissing the original lawsuit earlier in the year.

Kimba Wood opinion

The one issue which has been brought up during the litigation by the state of New York was that the case should be decided by a state court.  The state of New York does not buy the UFC’s argument that it would be harmed if it does not hold UFC 198 at MSG.  Rather, it states that the UFC still does not have legal “standing” in the state even though it has signed a “conditional agreement” with MSG.  Among its arguments opposing the grant of a preliminary injunction, New York argues that a state court should decide the law regarding the constitutionality of the law.  It also claims that the deposit for MSG would be refunded to the UFC if it coincided with an NBA or NHL playoff game stating that the Knicks or Rangers would trump the UFC event.

The lawsuit filed this past September by the UFC requests a preliminary injunction which would allow for the UFC to hold an event in New York despite the existing law preventing pro MMA in the state.

In 2016, we should see a resolution to the preliminary injunction and whether or not UFC 198 will be in Madison Square Garden or not.

15 for 15: No. 13 Wanderlei Silva’s legal woes

December 20, 2015

Even though he has not been active, Wanderlei Silva had an eventful 2015.  The former UFC star is still in a legal battle with the Nevada State Athletic Commission from his lifetime suspension and fine from the state of Nevada.  He is also defending a lawsuit from the UFC.

Silva appealed the commission ruling and the penalty (suspension and fine) were overturned by a Nevada state court.  However, in the court ruling, it issued that the case go back before the commission to determine an appropriate punishment for avoiding a drug test in lead-up to his fight with Chael Sonnen at UFC 175.

Silva’s attorney appealed the court ruling to the Nevada state supreme court.  Essentially, Silva argues that he was not licensed at the time that the drug test was to be taken and thus should not be subject to the rules of the Nevada State Athletic Commission.   However, the Court will not render a ruling on the appeal until the commission issues its revised ruling on the Silva suspension.  At its last commission hearing, Silva’s attorney offered a settlement which would end the matter with the commission.  However, the commission tabled the decision until another meeting date.

In the meantime, Silva put out a YouTube video degrading the UFC.  He also posted messages on Facebook which claimed that the UFC made hurt fighters fight and that fights were fixed.  His attorneys argued that these comments were made in god faith.

As a result, the UFC sued Silva this summer for defamation and business disparagement.  The lawsuit was filed in Nevada State District Court

Silva’s lawyers filed a motion to dismiss (a comprehensive breakdown is here) the lawsuit and were successful in dismissing the business disparagement claim but the lawsuit remains.

Silva claimed that he had information which would assist the current plaintiffs in the antitrust lawsuit venued in Nevada.  He has stated that he might be included as part of the class of fighters in the lawsuit but has yet to commit his name to it.

The Silva matter will be interesting if he is ever deposed in this lawsuit.  It is a rather unique tactic undertaken by the UFC to have legally gone after a fighter for talking out against the company.

New York files opposition to UFC’s Preliminary Injunction

December 12, 2015

Last week, New York filed its opposition to the UFC’s request for a preliminary injunction to allow the organization to hold an event in the state in April 2016.  The briefing cites legal authority opposing the injunction in preventing UFC 198 in New York’s Madison Square Garden.  New York cites the UFC-MSG “conditional agreement” which purportedly states that MSG may cancel the event if the NBA or NHL Playoffs conflict with the night of the intended UFC PPV as a showing that there is no imminent threat of harm to the company.

The filing comes after two continued due dates requested by the state of New York.

In its brief, New York argues that as a “threshold matter” the UFC lacks standing which precludes a Court from deciding an issue where a party has no injury.

New York argues that the UFC’s reliance on the conditional agreement with MSG for an event on April 23, 2016 does not establish standing.  Moreover, New York argues that if there is no injunction granted, there is no event in MSG and no “imminent threat of prosecution.”  Although the UFC contends that it has made a deposit for the event at MSG (reported at $25,000), New York argues that MSG may elect to return it.

According to New York’s brief, MSG may elect to return the deposit of the UFC if the NBA and/or NHL playoffs conflict with the Saturday, April 23, 2016 event date.  MSG, the primary venue for the Knicks of the NBA and the Rangers of the NHL are anchor tenants of the building.  If either or both teams are in the playoffs, they get primary rights to the building per New York’s brief.

New York has several arguments against the UFC preliminary injunction:

-As stated above, New York argues that the UFC lacks standing as it asserts that there will be no event without the injunction.  Without the injunction, MSG has the right to terminate the agreement.  It also argues that the economic injury is speculative.

-It also argues that the local district attorneys for the state of New York are not parties to the lawsuit.  The state has a right to enforce the New York ban on MMA and since they are a non-party, they would not be bound by the preliminary injunction.  Hence, the drawback of filing in federal court.

-New York also argues that the claims are not “ripe” for adjudication.  Essentially, New York states that the state AG nor the athletic commission have issued a cease and desist letter to the UFC regarding holding an event in New York.  Thus, it claims that the UFC cannot claim a “credible, imminent threat of prosecution” which is a requirement for a court to grant an injunction.

New York also claims that the U.S. District Court should abstain under the Pullman doctrine.  Under this case, where a state law is allegedly vague, a federal court should abstain from interpreting the law until the state courts have a reasonable opportunity to construe the statute.

Railroad Commission v. Pullman Co. is a 1941 U.S. Supreme Court Case which dictates that a federal court should stay (i.e., hold off on deciding) a decision on state law when the state court has yet to interpret.  It bases the decision on three factors:

  1. The case presents both state grounds and federal constitutional grounds for relief;
  2. The proper resolution of the state ground for the decision is unclear; and
  3. The disposition of the state ground could obviate the need for adjudication of the federal constitutional ground.

In addition to these arguments, New York attacks the UFC’s argument for a preliminary injunction.  Among its arguments against granting the injunction, New York claims that “[s]elf-inflicted harm cannot form the basis for injunctive relief.”  Specifically, entering an agreement with MSG to hold an event in April 2016 cannot be cause to grant the injunction.

Payout Perspective:

The UFC will have the opportunity to file a reply brief to oppose New York’s argument.  Notably, the Pullman doctrine which states that a federal court should abstain until a state court clarifies the allegedly vague could be the reason why Judge Wood stated in her March 2015 order dismissing Zuffa’s first lawsuit that they might want to refile in state court.

Under the Pullman doctrine, New York claims the court need not address the constitutional claim asserted by Zuffa that the ban on MMA in New York is vague.  Rather, it can wait until a New York state court interprets the state law.  Thus, the constitutional claim might be clarified by the state court and thus the federal court need not intervene.

The argument that the NBA or NHL might cancel a possible UFC event seems unlikely.  Usually venues have reserved dates for the NBA and NHL playoffs well in advance (that is, prior to the start of the 2015-2016 season).  Thus, MSG knew before the UFC asked for April 23, 2016 that it might conflict.  But, there are always work-arounds for this.  The games could be played earlier in the game.  Moreover, MSG should have contingent plans as the NBA and NHL have been juggling schedules for decades.

W. Silva’s NSAC hearing continued once again

November 30, 2015

The Nevada State Athletic Commission continued the disciplinary hearing of former UFC fighter Wanderlei Silva after Silva’s attorney presented a consent decree which the Attorney General stated it had yet to review.  The hearing stems from last year’s NSAC punishment that was subsequently overturned by a state court this past May.

Silva’s attorney Ross Goodman had appealed the state court decision which, in part, remanded the Silva’s case back to the NSAC.

Goodman had filed an appeal with the state Supreme Court, but the appeal was dismissed due to a jurisdictional issue.  Essentially, the district court that overturned Silva’s suspension and fine ordered that the case go back before the NSAC for rehearing for appropriate discipline.  Thus, without it going back before the commission, the judgment is not final and cannot be appealed to the state Supreme Court.  The parties dismissed the appeal as reflected below.

W Silva Appeal Dismissing Appeal and Cross Appeal by JASONCRUZ206

Silva’s attorney would like the appeal the judgment but needs the NSAC to render a decision on Silva’s matter to fulfill the order by the district court.  In the alternative, Goodman presented an order which, according to MMA Junkie, states that Silva did not commit any wrongdoing when he did not submit to a drug test in leading up to UFC 175.

The next athletic commission hearing is December 17th.

Payout Perspective:

In addition to this legal wrangling, Silva is being sued by the UFC for defamation.  It will be interesting to see how much this case will extend as we are over a year into this.  Silva’s attorney still contend that he was not subject to NSAC jurisdiction which makes whatever the commission rules seemingly mute as they will likely appeal.  Of course, it does seem that Silva’s counsel will make an attempt to resolve the matter short of an appeal.  This would be the most cost-efficient way to handle it if the commission is willing.  MMA Payout will keep you posted.

 

FTC closes second investigation of Zuffa

November 24, 2015

The Las Vegas Review Journal reports that the Federal Trade Commission has ended its second investigation of Zuffa without any findings of wrongdoing of the company’s business practices.  Although the investigation has ended, the FTC indicated that it reserved the right to investigate the company again if it saw a need. 

In a letter to Zuffa from the FTC, it indicated that the closing of the investigation should not be construed that a violation may not have occurred, just as the opening of the investigation should not be construed that a violation had occurred. 

UFC’s Chief Legal Officer Kirk Hendrick issued a statement on the FTC’s decision:

“Earlier this year the FTC informed us that it was conducting a non-public investigation, which we believe was instigated by former fighters or their attorneys to bolster a civil action against UFC,” Hendrick added, “After meeting with the FTC, we are pleased that they have sent us a letter stating that no further action is warranted and the investigation is now closed. We maintain full confidence in our business practices and continue to believe that the plaintiffs’ allegations are meritless.”

The letter from the FTC, obtained by the Las Vegas Review Journal is below:

UFC FCC by LVReviewJournal

The FTC investigated Zuffa after it had acquired Strikeforce in 2011.  The investigation came to close with no findings in early 2012.  A Freedom of Information Act request for documents from that first investigation revealed little as to their investigation.

Although the reason for the second investigation was not made public one might conclude it was due in part to the antitrust lawsuit filed by former UFC fighters.

Payout Perspective:

Good news for the UFC as it is clear of the investigation.  Moreover, it need not dedicate legal resources for this.  The FTC indicated that it may revisit the issue but one would think it is unlikely to occur unless something comes out of the antitrust case.

New York granted second extension to respond to Zuffa Preliminary Injunction

November 16, 2015

Judge Kimba Wood has granted the state of New York an extension of time to respond to Zuffa’s Motion for Preliminary Injunction which would allow a UFC event scheduled for April 23, 2016 at Madison Square Garden.  In response, attorneys for Zuffa have expressed concern that the delay may impact the event.

In a letter submitted on November 6th, John Schwartz, Special Litigation Counsel for New York, indicated that due to health issues experienced by his wife, he could not respond to the motion which opposition was due on Friday, November 13th.  It was noted that the second extension was not anticipated.  Schwartz also indicated that he did not believe Zuffa would be prejudiced by this delay.  New York will now have until December 4, 2016 to respond to Zuffa’s motion and Zuffa will have until December 14, 2016 to file a reply.

Letter From Plaintiffs Re 2nd Extension of Time by JASONCRUZ206

Judge Wood granted the request filed by counsel for New York last week.

In a letter dated November 7th, Jamie Levitt, attorney for Zuffa “reminded” the court that this was the second extension request to respond to Zuffa’s lawsuit filed on September 28th  The first was stipulated by the parties on October 9th.  The second, granted by Judge Wood, is due to an illness of the wife of the attorney heading the litigation for this case.  Levitt expressed the concern that the delay in the decision of the Preliminary Injunction may impact the April 23, 2016 event scheduled for UFC.

Letter From Plaintiffs Re 2nd Extension of Time

“The briefing schedule [for the Preliminary Injunction] was carefully negotiated by the parties to ensure that despite Defendants’ [first] extension, the Court would have sufficient time to consider and rule on Plaintiff’s motion by January 2016,” wrote Levitt.  “A ruling after January 2016 would not provide the UFC and MSG sufficient time to finalize and then market the scheduled April event.”

Levitt explains that the MSG licensing agreement and the sanctioning of the event cannot be easily rescheduled.  There was no indication of when another date might be secured for MSG.

Payout Perspective:

This is a delicate situation since it involves a personal health issue.  Zuffa had no grounds to oppose this request without looking totally heartless.  It would be clear that the court would have granted this request.  The unexpected delay may definitely impact an event in April if the court does not decide by the beginning of the year.  With the holidays upcoming, it is hard to say when a ruling might occur.  The Levitt letter puts the court on notice of the injury it may suffer if a decision is not made soon.  While New York argues that moving the date to another time would resolve the issue, it’s clear the UFC has banked on this date.  MMA Payout will keep you posted.

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